Let’s be honest, 2020 has probably interrupted your firm’s income. Quarter four is drawing to a close and you’ve got some clients who haven’t paid. It’s an unfortunate truth that some percentage of our billed services will not be paid. Your law firm’s collection rate can have a huge impact on your bottom line. Most law firms operate on a calendar year and are run on a cash basis, meaning work isn’t counted as revenue until clients pay. If you are a partner or even an associate, your compensation may be tied to the amount of money your firm collects on the work you billed. If you are a solo, you know all too well your compensation is directly tied to how much you collect on invoices. So the question becomes, how can you improve the collection rate at your law office?

Every business owner knows you want to collect as many outstanding invoices as possible. As we discuss how to best proceed, here are a few questions to consider:

  • How can I ensure that all or most of my bills get paid?
  • What behaviors, habits, skills, and processes will help optimize my collections?

Your firm may use tools like:

  • Requiring “cash upfront” in flat-fee cases
  • Obtaining retainers to cover anticipated fees and expenses
  • Choosing to limit practice to more profitable practice areas and clients

While these tools are great, they can limit your firm’s growth in the long run. It’s up to you to find the balance that’s right for your firm as the new year approaches. Start with your firm’s long-term strategic goals and work backward. Keep in mind that the longer a bill sits unpaid, the less likely it is that it will ever get paid.


So What Next? Assess Your Situation.

Now is the time to look at past-due accounts and figure out where you are leaving money on the table. You know better than most that no two clients are alike and that a corporate client will be vastly different from a family law litigant. This means that you will need to craft your collections strategy accordingly. A client who hasn’t paid you in six months will be handled differently from a corporate client who hasn’t paid you in three months (but has stable cash flow and can bear the cost). The tool you will need to assist you is your “aged accounts receivable” report. Here are some steps to take:

  1. Make a List: Such a list should contain the following:
    • the client name and information, including matter number if you use Clio or a similar software
    • the client’s outstanding balance
    • how “aged” said balance is (i.e., 30, 60, 90, 120, or 120+ days old)
    • the date and amount of the client’s last payment.

This information will help you get a proper game plan together.

  1. Prioritize Your Receivables: Once you have a sortable list of clients with outstanding balances, it’s time to build your game plan for collecting your money. There are a few ways to go about this, but first, we recommend breaking your list down into two categories based on the age of the outstanding balance: for example receivables that are over 120 days old (“Aged Receivables”) and receivables that are less than 120 days old (“Young Receivables”). Each group should have a unique approach. Remember what we shared earlier, the longer a bill sits unpaid, the less likely it is that it will ever get paid.
    • Since you have a better chance of collecting the balance due on “Young Receivables,” we recommend collecting the full balance owed and avoiding discounts if possible. The attorney working the case should aside some time to email each client on your Young Receivables List as it is less likely to be ignored by a client coming from an attorney than it is an administrator or other team member. The email should be clear and concise stating the outstanding balance, and a way to pay, they should have already received an itemized invoice by the time this email is sent. Your ultimate goal is to make it as easy as possible for your client to get their payment to you.
    • “Aged Receivables” are a bit more tricky. These clients have already avoided paying you for more than 4 months. While it can be tempting to write them off, we encourage you to keep trying. As the attorney did with the Young Receivables, set aside time to email each of the clients on this list. If the list is lengthy, you may want to consider subdividing the lister further into ones you believe will pay, and ones you would be pleasantly surprised to receive payment from aka the “Dream List.” An important distinction between these two categories is that some clients may have a legitimate reason for delayed payment or a genuine need of a discount.
      • Consider which of these you might be willing to offer a discount of some sort. Remember partial payment is better than no payment at all. Keep some restrictions on the discount offered based on timing. An example of this would be: immediately.


Hi [Client],

I hope you are well. Our records show that you have an outstanding balance of

$[10,000 – example] due.

I have spoken with our billing department and I was able to work out a deal for you:

If you remit payment of $[5,000.00 – example] within the next five business days,

the firm will forgive the remaining balance. However, if payment is not received

within that timeframe, you will still owe the full amount ($[10,000.00]). Please be

advised that this opportunity will not be offered again.

If you have any questions about your bill, please do not hesitate to contact me.

You can pay the $[5,000.00] online by clicking the link below my signature.

Thank you,

[Attorney’s email signature]

[link to pay online]


  • Collecting Aged Receivables can be tedious. Our recommendation is to incentivize your associates to chase after these Aged Receivables by offering the associate 25-50% of any of the Aged Receivables they are able to collect on. This helps increase their success rate and should promote some goodwill within the firm. At the end of the day, it will help you get paid on what you otherwise considered a hopeless account.


Once the dialog has been opened or re-opened: Get some ideas for best practices in the new year.

Ask your current clients about recent invoices. Since they have active cases, you will be having conversations with them anyway, right? So ask: “Did you see problems with their invoice regarding time entries or expenses, or did you have sticker shock?” Don’t be afraid to ask these questions. Avoidance will only lead to writing off or heavily discounting these invoices 60 or 90 days from now.

Ask if they are happy. Your current clients are receiving value from your services, so their desire to pay is higher. At least you hope so. If you are not sure clients are pleased with your services, you need to ask them. They will appreciate your concern and you can proactively avoid non-payment (or a possible negative online review). After all, if they say they are happy and get an invoice from you the next day, they should feel pretty bad about ignoring it.

Bill every two weeks through the end of the year. Billing current clients every two weeks will let you use the money sitting in the client’s trust account. It will also keep the bills smaller and the checks easier to write.


Get your tools in order: Embrace Technology

Let’s face it, life is shifting towards the digital. If you don’t have a way for your clients to pay easily online, you will be missing out on revenue. There are so many great tools available, Clio, LawPay, and others are all at your fingertips. If you do have one of these in place, make sure your processes in the office make it simple for your clients to pay or have access to their billing information.


Going Forward

As we move into 2021, carefully review your pain points from 2020’s billing. Here are a few best practices you may want to implement.

  • Build an Ideal Client Profile. Who was your favorite client to work with? What characteristics do they have? What needs did you meet for them? When you are conducting your initial consultations, not only are prospective clients interviewing you, you are interviewing them. Use this time to lay the foundation for a strong attorney-client relationship and clearly define expectations on both ends.
    • Determine whether the client’s needs and expectations can even be realistically satisfied.
    • If so, give the client a roadmap of what the most important next steps will be and the issues that may arise therefrom.
    • Ensure the client understands the cost and the law firm’s expectation of payment, discussing frankly how the client plans to pay and whether the client can afford the firm’s services. This should also be explicitly addressed in your fee agreement.
    • Refer back to your ideal client, is this prospect similar to them or will they be more of a risk? Trust your instincts. If you’ve been doing this for a while, you’ll likely know a few tells to look for whether you realize it or not.
  • Keep up the Communication. Have systems in place to help your team stay in consistent contact with ALL of your clients. This can help prevent liabilities and gives you touchpoints throughout your client’s case to control the narrative as events progress. It is harder to defend yourself against your client if you haven’t properly papered the file. Also, did you know the single biggest complaint against lawyers in the United States is “my lawyer won’t return my call?” Insufficient communication can not only get you in trouble with your state bar, but it can also affect the client’s willingness to pay their bill. Keep your client’s confidence and protect yourself by sending frequent – even if brief – messages and updates to the client. Remember, you are a team.
  • Bill Clients in a Timely Fashion. Consistent billing helps both your team and the client plan cash flow. You should aim to have your clients receive their monthly statements about 3-4 days after the first of the month. Sending invoices around this time increases the chances that the client has recently received a paycheck and therefore has funds available. Also, don’t wait too long to send your bill. Clients complain too often that they receive bills 90 days or more after the work is done. If that’s the case, it’s three months out from the time of service and it’s likely the client has forgotten all of the hard work that was put in. It’s natural that they will be less willing to pay you. If the work is fresh on their mind, you will find a client more willing to pay their invoice. The longer you wait to send out a bill, the less willing they are to pay.
  • Make Your Invoices and Billing Procedures Clear and Easy to Understand. The simplest way to do this is to provide your clients with a clearly-written, detailed invoice but don’t nickel and dime them! Use separate line items for the larger tasks rather than showing the minutes and include a brief summary of the work you did. Avoid legal jargon wherever possible. Your objective is to give the client visibility into what you’re doing for them. If you use too much technical language, your client may end up with even more questions.
  • Leverage Technology: Automated payments are wonderful! This especially true for clients who are habitually late and/or forgetful. Automated online billing allows them a recurring monthly payment plan. This is a great way to help them out financially and save you time and effort. In addition, this approach ensures you maintain a consistent, predictable cash flow in your practice. We recommend having clients sign payment authorization forms during their intake paperwork and set them up on a payment plan as part of your initial meetings and onboarding. That way, your clients’ payments can run automatically without any action needed from you or them and you can ensure punctual payments from day 1.
  • Follow Up on Unpaid Invoices ASAP: As we mentioned at the beginning of this post, you are going to have late payments and non-payment from clientele. Have a plan to follow up with clients who have not paid their monthly invoices. Remember, the longer a bill sits unpaid, the less likely it becomes that it will ever get paid. The best practice is to schedule a follow-up. About a week after invoices are sent, schedule time on your calendar to follow up via phone or email. Keep a running list of the clients who have not paid their invoices and how much each one owes. You should then reach out to the clients directly to inquire about payment.
  • Know when to vote a client off the island. We want to help people and it is instinctual to want to move a case along. That said, don’t fall into the bad habit of working on cases you aren’t being paid for. As hard as it is, if a client is more than a month behind on paying anything towards their invoice, you should strongly consider terminating them as a client. If you don’t have termination language regarding unpaid invoices into their fee agreements, you should strongly consider including some. At the end of the day, you are running a business and your attorney-client relationship should reflect that.

2021 is on the way. Move forward with the lessons of 2020. Don’t miss out on your Aged Receivables. Take the extra time to pursue that revenue. You’ve earned it! Put plans in place to make that list shorter next December. Let us know how your billing is going. We’d love to hear how these techniques make a difference in your firm and remember: be bold! Don’t leave money on the table— go out and get it.